On January 31, the opening price of the main Shanghai nickel contract was 127,000 yuan/ton and the closing price was 126,990 yuan/ton, down 200 yuan/ton from the closing price of the previous trading day. Intraday trading was weaker than the previous trading day, with a decrease of 32,225 lots in volume and an increase in open interest of 590 lots. This combination indicates that both the long and short sides have reduced their trades and are inclined to wait and see, but the bulls are actively closing their positions. The decrease in trading volume shows that the long position is more rational, and there is no urgency but the ideal price, so the market is mostly falling gently, and the probability of a sustained decline is high. On the macro front, we need to pay attention to the Fed's interest rate meeting announced on the evening of February 1, and the current market expectation for this interest rate meeting is the same as the last range. From a fundamental point of view, today's spot market is affected by the downstream stocking rhythm coming to an end, the transaction sentiment in the spot market has cooled down, and the supply of pure nickel has increased due to the arrival of some pure nickel. To sum up, it is expected that the follow-up nickel price may fluctuate weakly.
Pure nickel:
On January 31, Jinchuan premium was reported at 3400-3600 yuan/ton, with an average price of 3500 yuan/ton, the average price was flat compared with the previous trading day, and the price of Russian nickel premium was -100 to 0 yuan/ton, with an average price of -50 yuan/ton, which was flat compared with the previous trading day. Nickel prices continued to fall this morning, and the spot premium showed a slight pullback, and the spot trading atmosphere was weak due to the downstream replenishment rhythm coming to an end. Today's nickel bean price is 123,600-124,200 yuan/ton, down 500 yuan/ton from the spot price of the previous trading day, and the price difference between nickel beans and nickel sulfate today is about 3,445 yuan/ton. (The price of nickel sulfate is 3445 yuan/ton lower than the price of nickel beans).
Ferronickel:
On January 31, the average price of SMM8-12% high-nickel pig iron was 932.5 yuan/nickel point (ex-factory tax included), an increase of 2.5 yuan/nickel point from the previous working day. According to SMM research, Indonesia's local large-scale high-nickel iron smelters have about two months of raw material inventory, so that the smelter will maintain normal production in the month, and Indonesia's high-nickel pig iron production is expected to continue to be high in January. On the demand side, most steel mills have completed the pre-holiday warehouse, and due to the impact of the Spring Festival, the operating rate of steel mills will decline during February. To sum up, the supply and demand of high-nickel pig iron were weak during the week, and the price of ferronickel fell slightly. It is expected that the output increment of subsequent steel mills will be limited, and the loose supply of ferronickel will be difficult to change, and it is expected that the rebound of ferronickel prices will be limited.
Nickel sulfate:
On January 31, the SMM battery-grade nickel sulfate index price was 26,527 yuan/ton, an increase of 1 yuan/ton from the previous working day, and the price of battery-grade nickel sulfate was 26,500-27,100 yuan/ton, with the average price unchanged from the previous working day. Today's transaction is relatively light, mainly due to the difficulty of finding spot in the current market. However, some ternary precursor companies still have procurement demand for nickel sulfate spots, so under the current low circulating volume of nickel sulfate, the basic face is strongly supported by nickel sulfate prices.
Stainless steel:
SMM January 31: On January 31, the SS2403 contract opened at 14,040 yuan/ton and closed at 13,880 yuan/ton, down 240 yuan/ton from the closing price of the previous trading day. Intraday trading was weaker than the previous trading day, with a decrease of 5,846 lots in volume and a decrease in open interest of 9,200 lots. The total trading volume of the top five institutions today was 178892 lots, a decrease of 7,232 lots; The total long order volume of the top five institutions in long positions was 22,341 lots, a decrease of 2,238 lots; The total short position volume of the top five institutions was 34,554 lots, a decrease of 4,368 lots. It shows that both long and short funds have reduced their trading today and are inclined to wait and see, but the bulls are actively closing their positions. The decrease in trading volume shows that the long position is more rational, and there is no urgency but the ideal price, so the market is mostly falling gently, and the probability of a sustained decline is high. The spot premium is 270-470 yuan/ton today, and the futures price is under pressure. The main reason is that the Spring Festival holiday is approaching, the digestion of stainless steel is suspended, and although the price is stable, the transaction is relatively weak. On the macro front, the market focused on the US core PCE price index for December last week, with the GDP report showing a decline in US inflation. The data revealed that the U.S. economy grew strongly, with a year-on-year increase of 3.3% in the fourth quarter of 2023. Meanwhile, initial jobless claims in the U.S. rose to 214,000 last week, indicating signs of weakness in the current job market. While the market remains cautious about the Fed's possible rate cut in March, the Fed is widely expected to start cutting rates in the first half of this year, given the faster-than-expected economic growth and easing inflationary pressures.
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